What is the primary principle of the American Free Enterprise System?

• A. Freedom of individuals to own and operate their own businesses
• B. Government control over business operations
• C. Restriction of competition among businesses
• D. Universal wage standards for all workers

Answer: (A)

The primary principle of the American Free Enterprise System is the freedom of individuals to own and operate their own businesses. This principle emphasizes individual choice, allowing entrepreneurs to create businesses based on their own ideas, passions, and market demands. It fosters an environment where innovation can thrive since individuals are motivated to produce goods and services that meet the needs and preferences of consumers.

The free enterprise system relies on voluntary exchanges between buyers and sellers in a competitive marketplace, where the forces of supply and demand dictate prices and production levels. This autonomy not only encourages economic growth but also empowers individuals to take risks and pursue their aspirations without excessive governmental interference. The focus on individual ownership and initiative helps ensure a diverse array of products and services while driving efficiency and progress in the economy.